To keep your small business compliant with government regulations, as well as financially stable, getting to grips with your tax obligations is essential.
While dealing with these is best left to the professionals, if you’re currently in a position where taxes are your domain, understanding your tax obligations and streamlining the way in which you handle them, can help you make the very best decisions for the future of your business.
For those working with an accountant in Coral Gables, your business tax obligations will largely be dealt with by them, but it can still be useful to have at least a basic understanding of what taxes you may be required to deal with:
- Business property tax
Based on the value of the property or tangible assets owned by your business, local governments will assess how much business property tax you owe.
- Income tax
An essential tax for all business owners to pay, income tax is usually paid on an annual basis, and is levied on the profits that a business has made. However, with a good understanding of what deductions and credits may be available to you as a small business owner, you can optimize your income after-tax, and reduce your tax liability.
Working with an accountant is the most effective way to deal properly with income tax.
- Sales tax
For good and services sold by your business, the collection and remittance of a sales tax might be required, although this does depend on where your business is located, and its nature.
To avoid penalties for non-compliance, work with a local accounting service who will be up-to-date with all sales tax laws both in your state, and locally.
- Payroll tax
For any business with employees, withholding payroll taxes – such as Social Security tax, federal income tax and Medicare tax – from their wages is the responsibility of the employer. These must then be remitted to the relevant authorities in a timely manner. Note that as an employer, you must also pay a portion of these taxes yourself.
- Self-employment tax
For anyone who is self-employed, this particular tax is a bit like Medicare and Social Security taxes for employees, and helps to fund disability benefits and Social Security retirement.
If you want to effectively manage your finances as a self-employed person, you must understand these tax obligations, or at least work with a professional who does.
- Excise tax
Certain goods or activities provided by a business, including tobacco, alcohol and gasoline, are subject to excise taxes, and understanding if you must pay them, as well as how to calculate and remit them, is vital if you’re to remain compliant.
Strategies for tax planning
Understanding your tax obligations as a small business owner is very important, but planning for those taxes is arguably even more important. From structuring your business in such a way that it’s more tax-efficient, to minimizing taxes through the timing of income and expenses, and availing of all applicable credits and deductions, tax planning can help a business make the most of its financial position.
Working with a tax accountant in Miami can give you access to invaluable expertise and guidance that could not only help you meet all of your tax obligations, but help you make the most of any opportunities for saving on taxes, too.
Tax codes and small business tax obligations aren’t for the faint of heart, and if you want to keep your business stable financially, as well as compliant, professional guidance can be a literal lifeline.